Five Factors To Consider Regarding Our Donation Behavior

In The Elephant in the Brain, Kevin simler and Robin Hanson ask just how much of our behavior is influenced by our self-interest. As an explanation for why we do what we do, simply saying that we did something because we gained some material good, gained more social status, or received some type of pleasurable outcome is generally accepted, but ignored. It is clear that we have self-interest in doing things that we benefit from, but in many ways, we like to ignore self-interest and we prefer to explain our behaviors with more complex rationalizations for why we do what we do. This motivated reasoning, however, creates models that account for many factors without acknowledging the main factor that we would all rather ignore, the elephant in the room (brain), our self-interest.

 

Simler and Hanson investigate charitable donations in the framework of self-interest and consider the warm glow feeling that we get when we make charitable donations, help the person on the street, and generally do good things for others. They look beyond simply “we do things because it makes us feel good” and ask questions to get to a deeper level understanding of human behavior:

 

“The much more interesting and important question is why it feels good when we donate to charity. Digging beneath the shallow psychological motive (pursuing happiness), what deeper incentives are we responding to?

 

To figure this out, we’re going to examine five factors that influence our charitable behavior:
  1. Visibility. We give more when we’re being watched.
  2. Peer pressure. Our giving responds strongly to social influences.
  3. Proximity. We prefer to help people locally rather than globally.
  4. Relatability. We give more when the people we help are identifiable (via faces and/or stories) and give less in response to numbers and facts.
  5. Mating Motive. We’re more generous when primed with a mating motive.
This list is far from comprehensive, but taken together, these factors help explain why we donate so inefficiently, and also why we feel that warm glow when we donate.”

 

I have been writing a lot recently about charitable giving. Part of the reason why is because I see great potential in the resources at the disposal of the average American. We have a lot of wealth relative to the rest of the world, a lot of time relative to previous generations, and a lot of information available to us. However, rather than using our wealth, our time, and the information available to us to maximize our lives, make the world a better place, and solve pressing problems, most people waste their resources. I have continually been thinking about what I consider The Stupid Economy where we feel pressured to buy things we don’t really want to keep up with and impress people we don’t really care much about, and use our resources in pointless and meaningless ways.

 

Our world today has incredibly bright people working at meaningless jobs. We use a lot of our human potential, our creative energy and brain power, and our money to get people to drink sugary water. We invest massive amounts of attention in celebrity news and we celebrate technological inventions like iPhones without applying our hunger for technological improvement to other problems that could potentially save more lives or do more to protect the planet from human caused problems – like trash in our oceans.

 

I want to encourage society to move in a direction that is more considerate and careful with our resource use. I want to be part of something that builds toward a society that has a smart economy, where instead of complaining about the diminishing purchasing power of our society while simultaneously buying $100 jeans we celebrate the resources we have and put them toward real use to create sustainable development. If we are going to set out to do good in the world, we have to understand what Simler and Hanson describe in the quote above. We have to understand how our rationality is derailed, and we need to understand why it is important to be truly effective when we try to do good with what we have.

Mass Advertising

Have you ever wondered why you see so many advertisements for things you cannot afford? I hadn’t thought about this very much before reading Kevin Simler and Robin Hanson’s book The Elephant in the Brain, but if you look around you will see tons of ads for expensive things that many of us won’t end up buying. I won’t buy a Rolex watch, but I can picture billboards and advertisements for them. I know the slogan that both BMW and Mercedes have at the end of their advertisements, but I likely won’t ever buy a either car. Why are companies like BMW and Rolex advertising to people like me who don’t have the money or intention to buy their products? Wouldn’t it be wiser for the companies to advertise to people who actually wanted and could afford to buy the things they sell?

 

“When BMW advertises during popular TV shows or in mass-circulation magazines,” write Simler and Hanson, “only a small fraction of the audience can actually afford a BMW. But the goal is to reinforce for non-buyers the idea that BMW is a luxury brand. To accomplish all this, BMW needs to advertise in media whose audience includes both rich and poor alike, so that the rich can see that the poor are being trained to appreciate BMW as a status symbol.”

 

Sure, we can appreciate the aesthetic beauty of the car, the horsepower, the sport performance, and the quality of the interior, but a big part of purchasing a BMW is the status symbol. If the true reason for buying a BMW were the list of things we might give as reasons for purchasing the car, then advertisers would not need to make sure that everyone knew the car was an expensive way to show one’s status. Ads could be targeted to the people who really care about car aesthetics and performance, not to people who are just going to shuttle a bunch of kids back and forth to soccer practice.

 

I try hard to be aware of the pressures I feel when making purchases or considering new purchases. I try to understand that I am pulled to make a purchase to show off my status. I also try hard to understand that owning expensive items, having a large salary, and being economically successful do not necessarily define my value as a human being. Understanding what advertisers are doing when they show ads to mass audiences about things that demonstrate our wealth and should be seen (in the mind of the advertiser) as desirable helps me keep my focus on what matters – being a good person, producing value for human beings, and avoiding negative externalities that arise from my desire to show off. This is why I think it is beneficial to understand the mind and what is happening in our heads when we see a BMW advertisement. By recognizing what impulses the ad is targeting and understanding the human drive for status, we can redirect our money and energy to things that truly matter, and away from hollow status markers.

The Signaling Motives Behind Purchasing Decisions

Recently I have written about the way we use wealth and money to purchase things that signal something about us. The ideas for my posts have been from The Elephant in the Brain where Kevin Simler and Robin Hanson discuss ways in which we intentionally deceive ourselves and others in order to gain something, demonstrate a quality about ourselves, or provide some type of message to others without needing to be overt about our actions. There are lots of things about our identity, our values, and our survival that work much better under the surface rather than explicitly addressed.

 

Our wealth and money can be signals for our identity, personal character traits, and group status, plus they can be used to purchase other things that further signal these things about who we are. What is interesting is how much we are not aware of these signals, and the extent to which we fail to recognize or acknowledge the drive these signaling mechanisms have in our purchasing decisions.

 

Simler and Hanson write, “as consumers, we’re aware of many of these signals. We know how to judge people by their purchases, and we’re mostly aware of the impressions our own purchases make on others. But we’re significantly less aware of the extent to which our purchasing decisions are driven by these signaling motives.” We go out of our way to make certain impressions on other people, to show that we are part of a certain group, that we truly belong in a particular space, and that we are competent enough to know what we are doing. We put a lot of effort into demonstrating something about ourselves, even if we don’t think we are.

 

Sometimes we are expected to make these signals, and sometimes we make them so that we can fit in with a particular group or identity that we want to adopt. Doctors might purchase fancy cars even if they have high levels of student debt and can’t really afford the car. Runners might buy particular sunglasses to look cool at the group runs, and many religious people might spend a lot on fancy religious jewelry to show off wealth and faith at the same time. The things we buy, or don’t buy, reflect something about ourselves, the groups we belong to, and our values. With some purchases we try to be as visible as possible – like buying a fancy thing at a charity auction, and with some purchases we try our hardest to hide the evidence of our transaction – like say paying off a porn actress to stay silent about an affair. The thing we purchase may be an approved way to flaunt our wealth and social value (like a Tesla), but it could also signal a moral deficiency or a selfish behavior. We don’t always acknowledge it directly, but many of our purchasing decisions have these qualities, and it is probably best to be aware of this signaling behaviors when we are making purchases.

Conspicuous Consuption

Conspicuous consumption is probably one of the most damaging aspects of American society. It involves using our purchases to serve as a way to show off a particular aspect of who we are want to be. As Kevin Simler and Robin Hanson write in their book The Elephant in the Brain, “the idea that we use purchases to flaunt our wealth is known as conspicuous consumption. It’s an accusation that we buy things not so much for purely personal enjoyment as for showing off or keeping up with the Joneses.”

 

Throughout the book Hanson and Simler look at human behaviors and consider them alongside the stated reasons, beliefs, and excuses that people have for those behaviors. There are many things in life that we do without acknowledging ulterior motives. We have motivations that lie beneath the surface and drive our thoughts, feelings, and opinions. We do not examine and acknowledge these motivations, but they are real, and they are there.

 

Conspicuous consumption is the use of our wealth and ability to make purchases in a way that is ostensibly about one thing, but very likely are about something else that we would like to keep hidden from others. When we buy a fancy new sports car, we will tell others about incredible new technology, about how hard we have worked and how we deserve to treat ourselves, or about the incredible performance of the car. What we likely won’t tell people is that we felt that we deserved more attention and wanted to show off that could afford a new sports car. What we won’t acknowledge, even to ourselves, is how much our behavior is driven by others and by a desire to fit in, be praised, and make sure everyone is aware of our beliefs about our personal value.

 

Each of those things (showing how much we fit in, telling people how valuable we are, and receiving praise) are aspects of social life that we can’t just go around and obtain directly. Instead, we have to signal those things through behaviors and activities that we can spin as more sociable and more acceptable behaviors. Money and wealth gives us a chance to show off and to signal our competence or connectedness to the outside world. It gives us a way to brag without having to outright brag. We can be more humble in the ways that we show off by being indirect.

 

However conspicuous consumption can drive us to ignore climate change and the externalities of our actions. It can create stress as we strive to make purchases that put us in perilous financial situations – the opposite of what the purchase is supposed to signal. And it is ultimately all about gaining more status at the expense of others who cannot keep up. We spend a lot of time and energy attempting to show off our wealth so that we can be rewarded not by the thing we purchase, but with praise and respect of others that we may not really deserve. We should acknowledge these pressures and chose when we are going  to be conspicuous with our wealth, and when we will exit the signaling contest avoid showing off.

Desires

A frustrating thing about humanity is that we get tired of what we have pretty quickly. A new house, a new job, a new car all become part of our normal and fade to the background just a short time after we have them. The newness of the thing and the excitement it makes us feel disappear, and instead of appreciating what we have, it just exists with us as we start to look at other things we want.

 

This is part of the human mind that kept our ancestors striving for more and pushing to live better lives. Part of this mindset drove our evolution and helped get our species to the place we are at today. But in each of our individual lives, we can take this too far. Seneca, in Letters From a Stoic, has some advice with this in mind.

 

“Fix a limit which you will not even desire to pass, should you have the power. At last, then, away with all these treacherous goods! They look better to those who hope for them than to those who have attained them.”

 

We have all seen unnecessary and extravagant uses of money that seem more like showing off than anything else. What Seneca’s advice says, is that we should find a point where the use of money, the consumption of goods, or the continued accumulation of power just seems over the top. At that point of ridiculous extravagance, we should place a marker for ourselves saying no more. Over time, we should work to fit more things on the opposite side of that marker, constantly thinking about the things in our lives that are meaningful, help us live better, help humanity advance, or that just show off. The more we can be content without needing wealth to flaunt, the more we can live a meaningful life that we can enjoy. The limit we set can be at any point, which means it can be extremely extravagant, or it can be very modest. Learning to remember what we have and appreciate the things we have achieved and attained will help us as we place our marker which we do not desire to surpass.

Blind Desires

I think we need to do a lot more coaching with young people, starting early in high school, to discuss careers, ambitions, goals, and what the world is going to expect from young people once they leave high school or college and begin to enter the work force. In the United States, once we complete our education (and sometimes before our education is complete) we enter the job market and a world where we compete for jobs and compete for status. Our world becomes centered around a career that takes up 40 hours of our attention and focus each week. When we are not at work we retreat to our homes where we try to show the world what we have and how special we are. The goal for many of us become increasing what we have to show our high status. We want to go upward, to earn more, to be more, and to have more.

 

But why do we share this desire? Who sat down with all of us to tell us that what we must do is push ourselves in our career and become wealthy to define ourselves as successful? Who told us to all want more and more things? Why do we all desire more expensive cars, bigger homes, and a more impressive title? I would suggest that these are generally blind desires that we organize our life around without deep thought as to where these desires came from.

 

We should sit down with young people to talk about pitfalls of following this traditional path. We should talk to young people about research which seems to indicate that social interaction can be as important for happiness as ever expanding wealth. We should talk about the importance of not just building up our own career, but of building systems and communities that can bring people together, rather than just building up ourselves to show off.

 

In Letters From a Stoic Seneca writes, “we are plunged by our blind desires into ventures which will harm us, but certainly will never satisfy us; for if we could be satisfied with anything, we should have been satisfied long ago.” I don’t think everyone needs to abandon capitalism, stop working, and give up all desires, but I think we should be more considerate when we think about career decisions and the work we spend our time with. If we decide that we need a big house, an expensive car, and X number of material goods to be happy, then we will make career and work decisions that trade off our time, flexibility, possibly our health, and our relationships with others so that we can have these things. We should turn inward to make sure we are not pursuing blind desires and we should re-focus ourselves and our lives in a way that will help us find more satisfaction without needing to constantly one-up ourselves and others.

Collapse from Within

In the book Ego is the Enemy, Ryan Holiday includes a quote from Aristotle about success, ” Without virtue and training it is hard to bear the results of good fortune suitably.” Holiday includes this quote in a section of the book about Howard Hughes, the aviator, genius, and businessman who did some incredible things with his fortune, but ultimately crashed in a wasteland of his own ego. Hughes, Holiday explains, received a great deal of sustainable wealth as an inheritance from his father’s business and channeled that wealth into movie projects, a giant wooden plane that only flew once, and many other ventures that sometimes succeeded but more often failed to take flight.

 

About Hughes directly Holiday writes, “Howard Hughes, like so many wealthy people, died in an asylum of his own making. He felt little joy. He enjoyed almost nothing of what he had. Most importantly, he wasted. He wasted so much talent, so much bravery. so much energy.”  A common story arc that we have likely seen play out in real life as well as in movies or books is of someone achieving success and forgetting to keep doing the things that brought them success to begin with. The drive to be great can become overwhelmed by thoughts about how smart, how hard working, and how much better than everyone else the successful person had to be in order to reach the goal they sought after. When that happens, it is easy to forget the habits that drove success and clear thinking is replaced by ego. The ego begins to tell us that we don’t need to work hard, that we should seek attention and praise for who we are and what we have accomplished, and it begins to cloud our judgement and lead us to believe that we will be successful no matter what we do.

 

Holiday also writes, “We know that empires always fall, so we must think about why–and why they seem to always collapse from within.” Howard Hughes collapsed from within. He received so much wealth that he could spend it on whatever caught his eye and he could pursue goals that in hindsight seem laughable. He could whip up a storm of enthusiasm about flawed projects and use his wealth to suggest that he would succeed, as if the wealth accumulation of the past had any bearing on his future success and insightful thinking. In our own lives, we must recognize what parts of us threaten success when we achieve it. If we fail to be aware of things we pursue on purely egotistical grounds, then we too risk collapsing from within. On the other hand, however, if we recognize the pull of the ego, we can push back and remain humble, helping us make clear decisions and continue to work toward goals that truly matter once we have started to feel real success in our lives.

It Comes Down to Purpose

John Boyd was a brilliant military officer, strategist, and consultant who helped shape a generation of military leaders. Boyd is the focus of one chapter in Ryan Holiday’s book, Ego is the Enemy, titled, “To Be or To Do?” Boyd, Holiday explains, was a terrific air force pilot and a very insightful and influential mind within the armed services. He raised to the rank of Colonel,  but never was promoted to become a General and is not someone that most people have ever heard of. What Boyd represents for Holiday, and why he is an important figure for the book, is someone who chose his duty and service to his country over his own power, pride, and greed. Boyd set out to be the most meaningful version of himself possible, not to be the most impressive, rich, or comfortable version of himself. Holiday wrote the following about a piece of advice that Boyd gave to a young officer (emphasis Holiday’s),

 

“The choice that Boyd puts in front of us comes down to purpose.  What is your purpose? What are you here to do? Because purpose helps you answer the question “To be or to do?” quite easily. If what matters is you – your reputation, your inclusion, your personal ease of life-your path is clear: Tell people what they want to hear. Seek attention over the quiet but important work. Say yes to promotions and  generally follow the track that talented people take in the industry or field you’ve chosen. Pay your dues, check the boxes, put in your time, and leave things essentially as they are. Chase your fame, your salary, your title, and enjoy them as they come.”

 

What we can learn from Boyd’s life is that there are often conflicts and decisions that we have to make about doing meaningful and valuable work and trying to receive recognition and praise for who we are and what we do. Quite often, we can do meaningful things and be well compensated and rewarded, but not to the same degree as those who may do less meaningful things but make more of an effort to capture attention, please others, and maintain the status quo which rewards the talk but not the walk. This can be seen in the way that we compensate teachers relative to financial traders or in the way that lawyers like Bryan Stevenson working to protect the rights of death row inmates are compensated relative to lawyers like Michael Cohen who have worked in less meaningful fields for wealthy and powerful clients.

 

The lesson that Holiday tries to teach with the life of Boyd is that we can be content with living a life where we don’t feel that we get all the dues we deserve, where we don’t get all the praise and attention from others that we may feel we have earned, and where we are not always recognized for our valuable contributions equal to the impact of those contributions. But living this life is not somehow a loss. The praise and recognition I just described ultimately hold no real value in our lives. Making a difference, working on meaningful projects and helping shape the world around us in a positive direction is what brings true value and meaning to life. The conflict is that success is typically viewed through the lens of the first set of rewards, and it is true that we need to earn a decent wage to be able to eat, house ourselves, and live comfortably and happily. I don’t exactly do a great job of following the advice of Holiday in my own life, but it is helpful to keep his advice in mind and recognize when I am living for my ego and pursuing recognition and praise as opposed to when I am living to do meaningful work and striving to make a difference in the world.

Why We Don’t Talk Honestly About Mobility

A hidden conversation is constantly taking place in the United States. It is a conversation about who is deserving, who is successful, and who has done better for themselves than other people. The measuring stick for these conversations is financial wealth, and we don’t have this conversation out in the open. Instead, we have this conversation covertly, by expressing who we are with the things we have and the places we go. Having the most stuff, the most expensive car, the biggest house, and taking the best trips is a sign of success, and all these factors allow us to compare ourselves to those who have and do not have as much as we do. Our country tells us that material wealth is what we should desire, and we tell ourselves that anyone can achieve great wealth as long as they try hard. Those who don’t achieve great wealth, in this conversation, obviously are not hard working, and didn’t get the memo that bettering themselves and working hard is the way to be successful in our country.

Michelle Alexander would like to change the way this conversation takes place. Specifically, Alexander wants to address caste systems in America and highlight the lack of mobility in our country. In The New Jim Crow she writes,

“Conversations about class are resisted in part because there is a tendency to imagine that one’s class reflects upon one’s character. What is key to America’s understanding of class is the persistent belief—despite all evidence to the contrary—that anyone, with the proper discipline and drive, can move from a lower class to a higher class. We recognize that mobility may be difficult, but the key to our collective self image is the assumption that mobility is always possible, so failure to move up reflects on one’s character. By extension, the failure of a race or ethnic group to move up reflects very poorly on the group as a whole.”

By anchoring success around financial wealth, we create a zero sum system where more wealth for one person means less wealth for another. This is a broad overstatement to be sure, but it is the way that many people feel, and it is accurate when comparing success defined by material wealth with success defined by many religious ideals, or success defined by service and impact within the community. We avoid talking honestly about mobility challenges, because to remedy the problem means to give up some level of material success so that others may join in. This reduces our measuring stick of success and gives others an unfair leap up the ladder of financial success, at least as we understand it.

Our nation will never see racial equity if we continue to think of success purely in financial terms and if we ignore the ways that our society has embraced racial and economic castes. We must be honest about the lack of mobility within our society and recognize that a drive toward material wealth is a drive toward a goal that we cannot control on our own. Individuals and groups may be hard workers, but not all hard work is rewarded with wealth. The impact of our effort is not always reflected by our salaries, and the total of our bank account is often impacted by factors beyond our control. In a nation that in its history has implemented policies to minimize the wealth accumulation of black people while enhancing the wealth accumulation of white people, we should be honest about our caste system and about the ways in which economic mobility has been denied to certain people. Our current system ignores the reality of financial wealth, encourages sometimes dangerous competition in a zero-sum world, and pretends that everyone can be upwardly mobile as long as they have the right character traits.

How Effective Altruists Capitalize on Capitalism

In his book The Most Good You Can Do Peter Singer explains the way he thinks about economic objectives, equality, and how capitalism affects the American public.  Singer is globally focused on reducing the suffering of people in extreme poverty and what he explains in his book is that the levels of extreme poverty seen in the united states are far lower than levels seen in other countries. He also explores the idea that to be poor in the United States is better than to be poor in developing countries where there is not a structure of assistance and where there are not wealthy people who are able to make donations to help others.
Singer focuses on the idea of the wealthy helping those who are not as fortunate in his book, but his ideas of wealthy might not align with ours. With his global focus he sees ways in which the average American is vastly more wealthy than most people living throughout the world. Even though we may not consider ourselves wealthy, we are often much better off in the United States, and we often have a much greater opportunity to help others through doing good.
Capitalism in The Most Good You Can Do is explored as the source for both the great wealth in the United States even though it is also a source for great inequality within the our country and the global community. Interestingly, Singer views equality as a secondary goal or a useful byproduct of a society focused on doing good. He writes, “effective altruists typically value equality not for its own sake but only because of its consequences.” I would argue that Singer greatly values political equality and social equality since somewhere at the base of effective altruism one must believe that those who they are helping are equals because we are all human. However, the idea of everyone being on equal footing socially and economically is not a key aspect of effective altruism.  Effective altruists are not driving for more wealth and more things, but may drive toward greater salaries because it means they will have a chance to do more and provide more for those who are in the most unfortunate of situations.
“No doubt capitalism does drive some people into extreme poverty — it is such a vast system that it would be surprising if it did not — but it has also lifted hundreds of millions out of extreme poverty.  It would not be easy to demonstrate that capitalism has driven more people into extreme poverty than it has lifted out of it; indeed there are good grounds for thinking that the opposite is the case.”
Singer’s quote shows that our economic system cannot be blamed for the greatness of our society nor for its shortfalls. People within the same system experience greatly different pressures and outcomes, but what determines the overall health of our society is how we use the system in place. In capitalism the very wealthy have taken advantage of the system to benefit themselves, which is a side effect of the system that does deserve criticism.  I would argue that on the other end of the system, thinking of a socialist or communist society, we would fear that those who are the most disadvantaged would find ways to take advantage of the system as opposed to those who are the most wealthy.
The argument that I believe Singer would make, in regards to capitalism, is that those who do become super wealthy, or even moderately wealthy (which may mean the average American when we adopt a global perspective), can do the most good by choosing to redirect their resources to causes that they can meaningfully impact and that will meaningfully impact the lives of those who suffer the most.  Without a capitalistic system that allows us all to obtain the most wealth possible, we lose the opportunity to do the most good possible. A focus on social responsibility within a capitalistic society, Singer would argue, is the greatest change and source of positivity the world can provide.